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An entity sells a software licence + an installation service (routinely provided by third parties, does NOT significantly modify the software) + software updates + technical support. The software remains functional without updates or support. How many performance obligations exist under Ind AS 115?
AFour — licence, installation, updates and technical support are each separately identifiable
BThree — licence, installation combined with support, and updates
COne — a bundled output of an integrated software solution
DTwo — the licence and the rest combined into a single bundle
Answer & Solution
Correct answer: A. Four — licence, installation, updates and technical support are each separately identifiable
Each element is capable of being distinct (customer can benefit on its own) AND separately identifiable (installation does not significantly modify the software; updates and support are not used to produce a combined output). Four POs. Compare with the case where the installation significantly customises the software — there the licence + installation collapse into a single PO.
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